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The Scottish Association of Meat Wholesalers

The Scottish Association of Meat Wholesalers (SAMW) has submitted an innovative funding solution, which provides Scotland’s beef and sheep breeders with a significant increase in support, without any reduction in funding for the dairy and arable sectors, to the Scottish Government.

“We believe that the option we’ve presented to Government has the potential to reverse the damaging downward trend in livestock breeding which has existed since CAP reform,” said Alan Jess, SAMW president. “In addition to our core proposal, we’ve also given Government a variation to consider as an alternative solution. We believe both of these proposals ‘tick all the boxes’ without damaging other sectors in the process. They also ensure that the new level of funding is directed entirely towards those who are engaged in active farming.

“The debate over whether or not Article 68 can be used to provide essential additional funding for beef and sheep breeders has been raging for several weeks. There has also been considerable discussion surrounding the potential removal of funding from other sectors to ensure the survival of beef and sheep breeding in Scotland. It was against this background, that SAMW engaged a European financial and funding research agency to help identify new funding options, which would come within the terms of existing European Union rules and regulations. The agency’s work triggered further debate within our Association, resulting in the submission which we have now passed to Government and on which we are urging the Minister to give full consideration.”

SAMW’s core proposal is that the Scottish Beef Calf Scheme (SBCS) should be withdrawn as it currently stands and replaced by an area payment to encourage active livestock farming over as wide an area of Scotland as possible. As support is to be targeted at the first link in the ruminant livestock supply chain, namely suckler herds and the breeding ewe flocks, funding for the new payment should be drawn only from the beef and sheep sectors. To raise the £48m, which is allowed to be paid under Article 68, this would require a top slicing of all existing beef and sheep support by approximately 18.5%. The new funding generated by this would then be returned to active beef and sheep enterprises in Scotland’s Less Favoured Areas (LFA), which is the part of the beef and sheep sector which is most under threat. Crucially, the proposal does not dictate any particular type of production. Prevailing market prices and demand at the time would dictate the relative proportions of sheep and cattle production.

“This approach would provide significant new payments to LFA-based livestock breeders, targeting aid at more than 80% of the suckler herd and more than 90% of the breeding ewe flock,” said Mr Jess. “Obviously, beef finishers would have to accept a reduction in support. The benefit to such businesses, however, is that they would continue to enjoy a steady supply of high quality raw materials on which to base their finishing business. Their alternative is to keep collecting an enhanced support payment now and have no raw materials to work with in the longer term.”

Mr Jess also pointed out that, according to 2004 and 2007 census data, while the LFA suckler herd has declined by 6%, the non-LFA suckler herd has declined by just 0.25%. Similarly, the LFA ewe flock has reduced by over 9% in this period while the non-LFA ewe flock has declined by 6%. The problem clearly lies at the breeding point,” he said. “Applying additional funding at that point is therefore essential.”

SAMW’s variation proposal is that the calf scheme is retained, accounting for £16m of support, with a reduced top-slicing of existing beef and sheep support being used to raise the additional £32m. Once again, a total of £48m would be provided for the beef and sheep sector although, in this case, spread across both LFA and non-LFA areas.

“By keeping all other sectors out of this proposed re-distribution of funding, we believe this is the fairest possible solution to the present running down of Scotland’s livestock industry. In addition, while beef finishers would be making a funding sacrifice, under our proposals, these businesses would, in effect, be investing in their own future progress and prosperity.”

Both SAMW proposals address the need to use valuable support funds only for active farming enterprises. This is achieved through a stocking density clause attached to the proposed solutions.